Walmart Sues Visa Claiming Card Transaction Fee Fixing
Robin Beck, AFP/Getty Images
By Andrew Harris
and Christie Smythe


Walmart Stores sued Visa for allegedly conspiring with banks to fix transaction fees, the latest salvo of a multiyear legal fight between retailers and card issuers.

The world's biggest retailer seeks at least $5 billion in damages for what it claims are violations of federal antitrust laws that could triple that sum.

Walmart (WMT), one of dozens of large merchants that dropped out of a nationwide, multibillion dollar antitrust settlement with Visa (V) and MasterCard (MA) to pursue their own lawsuits, filed its complaint in federal court in Fayetteville, Ark., on March 25.

"Visa's monopoly power has enabled it to dictate price and inhibit competition," Walmart said in its complaint.

The settlement Walmart withdrew from, initially valued at $7.25 billion, was approved by a Brooklyn, New York, federal judge in December. It's now worth about $5.7 billion after reductions for the merchants that bowed out.

Visa sued the Bentonville, Ark.-based retailer in June to try to stop it from bringing its own case, saying in a complaint filed in Brooklyn that it sought to prevent "the continuation of endless, wasteful litigation between the parties."

Paul Cohen, a spokesman for Visa, declined to comment on the Walmart complaint.

'Enormous Damage'

Walmart claims the card company's conduct caused it to suffer "enormous damage" from January 2004 to late November 2012.
No banks are named as defendants in the case.

Walmart objects to the requirement that retailers who want to accept any payments via Visa honor all issuers' Visa-branded cards.

"There is no competition because merchants are prevented from realizing the price-reducing benefits that would result if issuers competed" over the fees they charged retailers who agreed to accept their cards for payment, according to Walmart's complaint.

The settlement of the case in Brooklyn followed years of tension over interchange fees that amount to as much as 2 percent of a sale paid for with a credit card. Retailers and trade associations opposed to the accord contended it didn't pay enough in damages and unfairly blocked all U.S. merchants from suing over fees in the future.

Major League Baseball's Minnesota Twins also dropped out of the settlement with Visa and MasterCard.

'Bloated Prices'

The team and other Minnesota businesses filed their own complaint against the credit card firms in February, claiming they "insulated themselves and their members from competition that would drive down the bloated prices plaintiffs have paid to accept Visa and MasterCard payment cards."

Fees charged by MasterCard and Visa are "far in excess" of associated network and bank costs for processing the underlying transactions, the team alleged.

The U.S. Court of Appeals for the District of Columbia on March 21 rejected a challenge by Walmart, Target (TGT) and other retailers to federal rules governing how much banks can collect for debit card transactions, leaving in place an October 2011 rule capping the average swipe fee at about 24 cents per transaction.

While banks had objected to the limit, retailers contended that if the Federal Reserve, which set the rate, had followed the law the fees they paid on each swipe of a customer's card would have been cut more and network competition enhanced.

The case is Walmart Stores Inc. v. Visa USA Inc., 14cv5101, U.S. District Court, Western District of Arkansas (Fayetteville).


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173 Comments

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ga7smi

long overdue - I loathe WALMART but hope they get serious about the legal action

March 29 2014 at 12:51 AM Report abuse +1 rate up rate down Reply
Debbie

Oh, boo hoo the Walton family and their heirs will loose a few million. If they paid and treated workers fairly I would care.

March 29 2014 at 12:01 AM Report abuse rate up rate down Reply
1 reply to Debbie's comment
setanta54s_back

grow up and see the real life and learn what entry level means,same for minimum wage.

March 29 2014 at 12:06 PM Report abuse -1 rate up rate down Reply
Legion

thats just to bad for walmart every retailer has that sjur charge thing there gonna loose that law suit if any thing i think visa should drop walmart like a pile of horse poo trader joes is way better than walmart will ever be

March 28 2014 at 11:33 PM Report abuse -3 rate up rate down Reply
1 reply to Legion's comment
ga7smi

price fixing was outlawed in the 1930's

March 29 2014 at 12:52 AM Report abuse +1 rate up rate down Reply
ilovestevetindle

HAHA i cut my walmart card in half..TO much charges WAY to much NOT worth having so big thrill..who cares..WALMARTS ripping u people off hahahaaaaaaaaaa

March 28 2014 at 11:26 PM Report abuse -1 rate up rate down Reply
frank.foreman

Visa operators are just participants in fraud and theft. They have had decades to place a pin restriction on their cards as other do , so that your card isn't a blank check laying around waiting for someone to fill in the blanks. Visa is kin to Bernie Madoff.

March 28 2014 at 11:05 PM Report abuse +1 rate up rate down Reply
stinkyheadzzz

BOTH are money grubbers can they BOTH lose PLEASE?

March 28 2014 at 10:32 PM Report abuse +1 rate up rate down Reply
gnikknarf

I have often wondered when the merchants are going to wise up to the crtedit card isuers who can afford to pay substantial cash and in kind rebates to the merchants' customers. If the banks can do that one might assume they are charging the banks and the borrowing cardholders too much money.

March 28 2014 at 10:27 PM Report abuse +2 rate up rate down Reply
johnbarfneck

I hope they win and win big, then these banks and credit companies will be on the hot seat from now on.

March 28 2014 at 10:27 PM Report abuse -1 rate up rate down Reply
johnnyrae

I have not shopped at WALMART in close to 10 years ... would love too see them really feel the pain they subject on the working class ... Walmart , a.k.a. KOCK Brothers , freaking hand in hand with the subjugation of working class America ... As for VISA , hell, they had the audacity to try and cripple Wikileaks ...
America, WAKE UP...forget Walmarts and any of the BANKSTER/ROBBER Barons who try to cripple our Nation

March 28 2014 at 10:26 PM Report abuse +3 rate up rate down Reply
crrunch

With all the sh*t storms with WalMart and the banks - sounds like WalMart is using this as pro-customer ploy, and I say ploy because customers will never accrue any seeable benefit if they or anyone should win. I remember the days when Farm and Fleet didn't accept credit cards. The first time was kind of a slap but I got over it because their prices were lower than anyone else's for same item. CC co's took advantage of us creating it an everyday event to spend what we don't have. And we fell for it, human nature being what it is minus the responsibility factor. I'd much rather they cut their cc perks and give me back my 3.25% before 'regulation' hit the fan.

March 28 2014 at 10:18 PM Report abuse +3 rate up rate down Reply